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Tuesday, 22 July 2014

Saudi Arabia tightens control on zakat

The Saudi Ministry of Social Affairs is warning Saudis seeking to fulfil their zakat duty during the holy month of Ramadan against donating funds to those who solicit money via social networking tools.

There is an inherent risk in using social networking tools such as Twitter and WhatsApp to make donations, the ministry said, as true identities can be concealed and well-intentioned donations can fall into the hands of terrorist organisations which sometimes use charitable organisations as a cover.

Those who wish to donate money are encouraged to give to the more than 700 licensed charitable organisations in the kingdom, to social security offices or to organisations involved in the Al-Khair al-Shamel (Global Goodness) project, the ministry said.

These groups document donations in a transparent fashion under the state's auspices, it added.

Before Ramadan began, the Ministry of Interior warned it would impose the penalty of precautionary sequestration on bank accounts found to be involved in the unregulated collection of donations.

Al-Qassim University lecturer Yasser al-Muhanna said the issue of zakat funds and charitable donations is of paramount importance in Saudi Arabia as some "proponents of deviant ideology" exploited people's religious sentiments to obtain money through duplicitous methods.

One of these methods involves shaming stock brokers and traders into donating money to dubious organisations by telling them large portions of their profits are "usury".

"This is aside from the phantom organisations that used to roam the towns and villages to collect donations, alms and zakat funds under the pretext of supporting the mujahideen," he said.

Saudi authorities have since taken measures to cut off this flow of funds, al-Muhanna said.

The task of monitoring the collection of zakat funds and donations has been brought under the auspices of the counter-terrorism strategy which has been in place since the 1990s, he said.

In 1995, the Ministry of Interior, the Saudi Arabian Monetary Agency and commercial banks formed special units to monitor and combat money laundering.

"In 2011, [authorities] began strict monitoring of the work of charitable organisations and legal amendments were made concerning the operation of banking and financial [institutions] to close any loopholes that may be exploited to raise funds for these groups," he said. "Additionally, banks insist on knowing the identity of their customers, their financial and commercial activities and nature of the transactions they conduct."

The government also made legal amendments to the zakat collection system in order to monitor investment activities that were not previously covered, particularly transactions involving goods, commodities, buildings, land and real estate, he said.

MONITORING MECHANISMS

"Zakat collection in Saudi Arabia is undertaken by the Department of Zakat, and the funds are distributed by the General Organisation for Social Security," Shamel Humaidan of the Department of Zakat and Income in Riyadh told Al-Shorfa.

The Ministry of Labour and Social Affairs also monitors charitable organisations through its Department of Organisations -- a group of chartered accountants who audit their accounts -- and via 400 social development committees across the nation which report on the organisations' work.

Last year, the ministry distributed 25 billion Saudi riyals ($6.7 billion), the total amount of collected zakat funds, in addition to 1.5 billion riyals ($400 million) paid out monthly by the General Organisation for Social Security to about 700,000 families, Humaidan said.

Saudi Arabia monitors the financial activity of charitable organisations by limiting them to one bank account administered by two members of their board of directors and by requiring they first obtain approval from the security authorities and the Saudi Arabian Monetary Agency to open the account.

These accounts are used for deposit only, not disbursement, Humaidan said, and no cash withdrawals or transfers abroad are allowed.

Meanwhile, the Ministry of Islamic Affairs continuously monitors the performance of imams, preachers and workers at mosques and intervenes immediately if any of them comes under suspicion, Adel al-Usaimi, imam of al-Khair mosque in Riyadh told Al-Shorfa.

"Several fatwas were issued by the supreme religious authorities prohibiting the payment of zakat and donations to misguided groups, most recently by the Grand Mufti of Saudi Arabia, Sheikh Abdul Aziz Al al-Sheikh, who warned against paying zakat or making donations to non-deserving recipients, especially terrorist groups that were included on the official list," he said.

In Saudi Arabia, cash donation boxes are not allowed in mosques, markets and malls, as cash donations are accepted only at banks, al-Usaimi said.

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